Proven oil reserves [in Russia] are 106 billion barrels, that is around USD 6 trillion according to current market prices. Forest reserves are estimated to reach 83 billion cubic metres. If we multiply it by the average market price of round timber, around USD 70, it is also 6 trillion. But while oil is formed over 100 million years, a good tree needs 100 years to grow. So, it is interesting to find a way to make this important economic and ecological resource more valuable and more sustainably used in our economy — Alexey Chekunkov, Chief Executive Officer, Far East and Baikal Region Development Fund.
The prime cost of Finnish products that are delivered to the global pulp market and to consumers is around USD 500 per tonne of pulp. In Russia, given the prime cost and potential of Russian timber, we can offer the cost of USD 350. If we started developing this industry in Russia, we could squeeze the Finnish out and have 20% of the pulp market instead of current 2% — Mikhail Shamolin, President, Chairman of the Board, Segezha Group .
Globally, over the last five years the growth of the forestry sector reached 3% per year, and it corresponds to the global GDP growth rate. In Russia, over the same five years, the forestry sector growth was faster than GDP growth, mostly due to the export. In the Far East this also was the case in a number of segments — Igor Prutov, Partner, Transaction Advisory Services, EY.
We can see the potential of the industry. Last year the amount of investment in Russia was RUB 165 billion of capital expenditure, which is, according to different estimates, from 0.13% to 0.14% of GDP. In Finland it is four times more. So, there is room for improvement — Vladimir Sitnov, Senior Vice President, Sberbank.